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How Data Analytics Can Raise the Bar on Safety and Quality Programs

New tools and emerging data sources can provide global manufacturers with increased insights into product safety and quality issues, allowing for faster detection and resolution to mitigate loss of customers and vendors, and related costs, according to Greg Swinehart, Deloitte Risk and Financial Advisory partner serving as the Safety & Quality practice leader in Deloitte & Touche LLP. He also discusses how data analytics and technologies can help strengthen the decision-making process and provide brand advantages.

Gregory Swinehart

Q: What are some of the challenges organizations face in terms of managing safety and quality?

Greg Swinehart: There are several, but a significant one is the number and range of stakeholders impacted by safety and quality—and their increasing sophistication and interest in products—including their origin, how they were manufactured and other attributes. Safety and quality are very closely related, and both should be viewed from the perspective of customers and employees foremost, but also from the view of other stakeholders such as regulators, suppliers and vendors.

Another challenge is the decision-making around voluntary product recalls and the speed at which such decisions should be made. Product recalls are a clear case of how the more efficient and effective a company’s processes are, the better the impact on outcomes and reputation. In voluntary recalls, a company discovers a problem before a regulator does and must decide on how to handle it. Voluntary recalls require business leaders to make complicated judgments that are informed by data and analysis from a variety of sources, including social media, customer call centers and online product reviews. It’s critical that organizations have the data they need to make a timely recall decision that serves customer needs while protecting the brand.

The amount of available data itself can be a tremendous challenge, as well as an opportunity. The data ranges from social media, customer call centers, compliance centers, dealer feedback and warranty information, to various commercial websites that feature product reviews. All that can make the information-gathering and analysis of determining whether to issue a voluntary recall daunting.

Q: What resources and tools are available to help companies improve their safety and quality response processes?

Greg Swinehart: There is an ever-growing number of data sources, as well as methods for gathering, analyzing and presenting data, which we utilize to help organizations increase their safety and quality profile. For example, apart from social media and other traditional media, there are more specialized data sources that can be of value to a safety and quality review, such as geospatial data, weather data and academic data. Another example is warranty waste data, which can be another important indicator of safety and quality issues. Such data can yield insights into trends in product warranty claims, as well as costs a company may be paying out wrongfully due to systems not working properly.

Through our Ventures Fund for Safety and Quality, we also now have many models we can apply to data analysis, running from simple visualizations to correlations and regressions that look for relationships among the data and unusual events. There’s also advanced statistical methodologies specifically designed to identify unusual and rare events, along with natural language processing as well as the beginnings of artificial intelligence and cognitive computing. All those tools can be applied to help companies find signals indicating safety or a quality issues, and sort through the data for patterns and insights. Additionally, companies today can take advantage of tools to monitor product feedback in real time, rather than waiting for batched summary reports.

Q: What benefits can organizations derive from improved safety and quality oversight?

Greg Swinehart: Taking advantage of the wealth of data sources and analytic techniques can help companies identify and analyze quality and safety problems early on, and thereby reduce potential harm and dissatisfaction to customers as well as their own risk and cost exposure. That can lead to bottom-line savings, as evidenced by lower recall and warranty costs, as well as potentially fewer injuries to employees or customers.

Being proactive about voluntary recalls, for example, can have a significant cost benefit—imagine the savings if you catch a recall problem early and it affects 500,000 product units and their users rather than later when an issue could involve ten times that number. The benefit of early notice about a possible product issue grows even larger for companies operating on a global scale, where multiple regulatory regimes can come into play.

Not only is there the bottom line cost benefit of early detection, the brand advantages are obvious. Companies want to be known for producing high quality and safe products—it is part of a strong brand. Cutting edge tools designed to protect and enhance the brand can be very valuable.

Q: Which sectors are being impacted by safety and quality issues, and are they taking advantage of available technologies to manage them?

Greg Swinehart: Generally, most all manufactured product sectors are being impacted, but the landscape is definitely more active and challenging for certain sectors than others. For the life sciences sector, particularly pharma companies, and to a lesser extent medical device companies, there is more information available on the effects of drugs and other products. When you think about the thousands of different pharmaceutical products that exist, there are more and more people using the products, and they are creating more information about user reactions, opinions and experiences. There is an incredible amount of data, and it is growing exponentially, that needs to be analyzed, which can yield important information and insights for these companies.

For the automotive and food manufacturing sectors, there is also significant amounts of information available that can be used to analyze and develop ways to enhance quality and safety. Both sectors are facing more scrutiny in terms of safety and risks and they are experiencing more aggressive enforcement. For these and other sectors, gathering the appropriate data and having the technologies to sort and analyze it through various lenses is increasingly important to managing safety and quality.

Yet, despite the availability of data and tools for managing quality and safety, adoption is not as fast as I would have expected. Naturally, it can take a while for some companies to get their arms around the tremendous variety and volume of data, and to understand how to capture it, model it, and act upon it. At the same time, there are a number of organizations, such as science-based companies, that are very sophisticated in using data and technologies to address safety and quality issues.

Q: How are safety and quality matters affecting the talent and skills needed to manage them?

Greg Swinehart: Most manufacturers have safety programs and a quality department that are sufficient in size and talent to manage what they have faced historically. What they often don’t have is the people who, for example, understand how to gather social media data and then analyze it. Companies need more people who understand what data is available to the enterprise, how it can be tapped into most efficiently and effectively, and how it can become the input for deeper analysis. While some organizations have plenty of data, they can struggle if they don’t have statisticians and data scientists—the people who can understand advanced econometrics, artificial intelligence and machine learning well enough to get the maximum benefit out of that data.

Q: What questions should executives and boards be asking about safety and quality?

Greg Swinehart: Boards and senior executives should be asking the person in charge of safety and quality oversight about staffing levels and if they have enough of the right people in their department. Are they using the most advanced sensing and analytical techniques? It’s also important to know if there is a philosophy of continuous quality improvement, and the tone at the top to embed that philosophy into the organization. Quality is not a static thing that once you achieve it, you can sit back. Quality should be something companies are constantly trying to be better at, and at its highest level it becomes part of the culture. It’s also important to understand if quality leaders are aware of the many tools and technologies available and—equally important—taking advantage of them.

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